Evolva announces interim results for first six months of 2010
Evolva Holding SA (SIX: EVE) today announced its interim results for the period 1 January to 30 June 2010.
- (1888PressRelease) September 14, 2010 - Highlights
* Revenues increased to CHF 9.4 million (2009: CHF 7.8 million)
* Net loss for the first six months was CHF 11.4 million (2009: CHF 3.4 million)
* Total cash position as of 30 June 2010: CHF 48.0 million
* Two new collaborative agreements signed with Roche for Cancer and Infectious Diseases and the Danish Council for Strategic Research for Vanillin production
* Continuing progress made with existing partnerships
Neil Goldsmith, CEO and Managing Director commented “This has been a positive start to 2010. We are committed to maximising the potential of our synthetic biology platform which has potential application across a multitude of industries. I am delighted that we have signed two new discovery and development agreements for the pharmaceutical and nutrition markets. This illustrates the scope of our technology platform and the potential it has to offer.”
OPERATIONAL REVIEW
Evolva’s strategy is to maximise the potential of its innovative synthetic biology technology platform through the discovery and development of novel compounds and production methods. The company is building a broad portfolio of compounds which have commercial applications in the pharmaceutical industry and a range of other industries including nutrition, chemicals, agriculture and energy.
This strategy offers a balance of risk and reward as the development and approval timelines differ across industries: the pharmaceutical industry offers high risk/high reward and long term clinical product development timelines; whereas the time to market for innovative products in the nutrition, agricultural and energy industries can be shorter. Evolva is entering into multiple discovery and co-development collaborations with industry partners to develop new compounds and methods to optimise production. These partnerships not only generate revenue for Evolva but can also provide ongoing success related development milestones. Evolva is also developing its own proprietary pharmaceutical products which it will out license for further development and commercialisation.
Pharmaceuticals Portfolio
Evolva has built an impressive pipeline of compounds currently at preclinical and clinical stage of development.
Evolva’s Proprietary Pipeline
EV-077: Cardiorenal Disease
Evolva’s lead product, EV-077, is for the treatment of Cardiorenal Disease. It is an oral thromboxane receptor antagonist and thromboxane synthase inhibitor and belongs to a novel structural class of drugs. Evolva has prioritised the development of EV-077 for proteinuric renal diseases and cardiovascular patients who do not respond adequately to existing anti-clotting agents. Earlier Phase I data confirmed the potency of EV-077 as an inhibitor of platelet aggregation without raising any safety concerns. Data from the recent pharmacokinetic study has identified an extended release formulation that is suitable for further development. A multiple ascending dose study will start in Q4 2010 to determine the optimal dose range for Phase II.
EV-086: Antifungal
EV-086 is a broad spectrum antifungal compound and represents a new structural class incorporating a novel mechanism of action compared to existing antifungals. It is in late preclinical development for treatment of invasive fungal infections and nail fungi. EV-086 can be delivered orally, by infusion or topical application. Against most medically relevant fungi, EV-086 has shown to be more potent than the existing anti fungal drugs. Evolva has prioritised the development of EV-086 for treatment of invasive fungal infections via intravenous infusion and by oral administration, and for the topical treatment of nail fungus.
After meetings with leading experts in the antifungal therapeutic area, the development team has moved forward with its program for EV-086. A specific invasive Candidiasis model is being developed in collaboration with our partners to perform several proof-of-concept studies for the systemic application (oral and i.v.) of EV-086. For the topical application of EV-086 several formulations and therapeutic approaches are currently being investigated and intellectual property relating to delivery mechanisms acquired.
Partnerships
At present, Evolva has 6 discovery and development agreements, including programmes with the US Army Research Office and US Defense Threat Reduction Agency.
US Army Research Office: Anti-bacterials
Evolva’s US subsidiary has a contract with the US Army Research Office to discover molecules that inhibit the growth of the bacterial pathogen Burkholderia pseudomallei. In the first half of 2010, several new structures were isolated with inhibitory activity on Burkholderia th. In addition various novel targets were discovered and confirmed in-vivo. The programme is scheduled to run until January 2012.
US Defense Threat Reduction Agency (DTRA): Anti-pathogen Therapies
The objective of this programme, using Evolva’s synthetic biology platform, is to identify and develop compounds which modulate aspects of the immune system to provide an increased ability to resist infections from a variety of pathogens. During the first half of 2010 Evolva found several new structures with potent activity on NOD receptors (human receptors that detect pathogen presence). There are two compounds being developed: EV075, for haemorrhagic fevers (the Ebola virus in particular) and influenza; and EV-021, for Anthrax. This programme is planned to run until August 2011.
EV-075: Antiviral EV-075 is an orally available small-molecule antiviral being developed for prophylactic and potential therapeutic use against viral diseases. EV-075 has a different mechanism of action from existing anti-virals and has shown efficacy against a range of viral infections in preclinical studies. EV-075 is currently being prioritised for the indications of haemorrhagic fevers (the Ebola virus in particular) and influenza. In the first half of the year, good progress was made in late-preclinical work on EV-075. Studies regarding the development of an oral formulation are ongoing with additional data expected Q4 2010. This additional data will serve as a basis for further discussions with the US Defense Threat Reduction Agency (DTRA) regarding the funding of the programme.
EV-021: Antibacterial Preclinical studies for EV-021 have shown protection against both Escherichia coli and Bacillus anthracis (the causative agent of Anthrax disease). EV-021 entered preclinical development in early 2010 and initial studies evaluating the tolerability of EV-021 have commenced. Efficacy studies to optimise the dose, treatment regimen and the drug formulation are in progress. The preclinical development of EV-021 is funded by the US Defense Threat Reduction Agency
Roche: Cancer and Infectious Diseases
In January 2010, Evolva announced a collaborative agreement with Roche to identify and develop compounds with activity on targets in oncology and anti-infectives. The programme progressed to plan in the first half of 2010.
Functional Genetics: Antivirals
This programme, focusing on creating novel anti-viral compounds, ended in August 2010, as planned. Evolva made good progress during the first half of 2010 and expects to continue work in the space during the remainder of the year.
Industrial Pipeline
Evolva is building a pipeline of compounds for the industrial markets. The Company has a market-led approach and is working with companies across a range of industrial sectors to discover and develop innovative compounds through its technology platform.
FØSU: Vanillin Production
In March 2010 Evolva announced that its Danish subsidiary is participating in a 4-year research initiative sponsored by FØSU (Danish Council for Strategic Research, Programme Commission on Health, Food and Welfare). Evolva aims to find approaches for a commercially viable and environmentally friendly production of vanillin as part of the application of its synthetic biology platform to “white” (industrial) biotechnology. During the first half of 2010 the programme was executed to plan.
EV-050: Agricultural antifungal
EV-050 is a potent antifungal which has shown activity against plant pathogens such as Botrytis cinerea. Evolva is investigating the potential of EV-050 for use in the agricultural market. Formulation development for field application is currently at the optimisation developmental stage.
FINANCIAL REVIEW
This review presents the financial development of Evolva Holding SA and its subsidiaries (“Evolva” or the “Evolva Group”) for the first 6 months of 2010 (H1/2010). The numbers presented for comparison for the first half of 2009 concern only Evolva SA and its subsidiaries, i.e. they do not include the financials of the former Arpida Ltd.
Summary
The net result of the Evolva Group for the first six months of 2010 was a loss of CHF 11.4 million compared with a loss of CHF 3.4 million in the same period in 2009. Revenues increased to CHF 9.4 million (CHF 7.8 million) amongst others because of a new partnership with Roche. Operating expenses went up from CHF 11.3 million to CHF 21.0 million primarily because of a significant increase in R&D activities, higher G&A costs and a non-cash charge related to employee share options. As of 30 June 2010, Evolva had a total cash position of CHF 48.0 million reflecting the capital increase that the company conducted at the end of 2009.
Income statement
During the first six months of 2010, Evolva had total revenues of CHF 9.4 million from discovery partnerships based on Evolva’s technology. Two partnerships with agencies under the US Department of Defense represented around 80% of total revenues while additional revenues came from the new partnership with Roche, from contracts with two corporate customers in the US and from public research contracts in Europe.
Total operating expenses in H1/2010 amounted to CHF 21.0 million, of which more than 75% went into R&D activities. Costs related to discovery and technology amounted to CHF 9.6 million for H1/2010, an increase of CHF 1.7 million compared with the same period in 2009, largely due to increased activities related to new partnerships. Costs related to compound development increased to CHF 6.0 million (CHF 1.5 million), mainly because lead compounds progressed further towards clinical development. General and administrative costs increased from CHF 2.0 million to CHF 5.5 million. This increase was primarily related to the employee option charge (see below) but it also reflects increased business development and facility costs.
The personnel costs in all areas in H1/2010 were significantly impacted by a non-cash charge of CHF 3.6 million related to employee options that were granted in 2009. As of 30 June 2010, around 2% of these options have vested.
Balance sheet and cash flow
Total assets in the Evolva Group amounted to CHF 85.4 million compared with CHF 92.9 million at the end of 2009. The key change was a reduction in the cash balance of CHF 4.9 million to CHF 48.0 million. The net cash flow was primarily the result of an outflow of CHF 7.6 million from operating activities and an inflow of CHF 3.8 million from financing due to the payment by Ventureast/APIDC of the last tranche of their investment in Evolva India.
OUTLOOK
Evolva expects that group revenues for the financial year 2010 will be close to the level of 2009. Furthermore, the company estimates that the net cash outflow for 2010 will be around CHF 18 million.
In its proprietary pipeline, Phase I results for EV-077 are expected in H1 2011. A Phase II proof-of-concept study could then be initiated in the second quarter of 2011.
The formulation trial results regarding the topical application of EV-086 are expected in Q4 2010, with Phase I trials expected to commence H1 2011. The preclinical trial results for intravenous and oral formulations of EV-086 for invasive indications are expected Q4 2010, with Phase I trials expected to commence H1 2011.
Evolva continues to work with the US Department of Defense on the discovery projects. Preclinical testing of EV021 is expected to be completed in the first half of 2011. Evolva is in close contact with DTRA regarding subsequent steps in the development of EV-021 and EV-075.
The Company expects to sign additional partnerships, or extensions to existing agreements, during 2010 and 2011. The Company is also investigating the potential for acquisitions that support its overall business strategy of using synthetic biology to build a distinctive and balanced portfolio of products with strong profit potential.
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